FG yet to disburse N420bn Cabotage fund 10 months after directive

There seems not to be an end to the delay in the disbursement of the over $350 million (about, N420 billion) Cabotage Vessel Financing Fund (CVFF) months after the federal government appointed five banks as primary lending institutions.

The government had in December 2022 appointed five commercial banks for the quick and easy disbursement of the N420 billion, 20 years after it commenced collection of the fund.

The banks are Union Bank, Zenith Bank, Polaris Bank, United Bank for Africa (UBA) and Jaiz Bank. 

Former transportation minister, Mauzu Sambo, at the flag-off ceremony of Batch B of the 3rd phase of the Nigerian Seafarers Development Programme (NSDP), said former President Muhammadu Buhari directed that the fund be disbursed immediately. 

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But 10 months after the appointment of the banks as primary lending institutions, nothing has been done.

This is despite repeated calls made by indigenous ship owners on both the Nigerian Maritime Administration and Safety Agency (NIMASA) and the five banks for the disbursement of the CVFF to fast-track the process of giving the fund to qualified Nigerian ship owners to buy new ships.

The CVFF is an intervention fund that was created in 2003 to provide financial assistance to Nigerian ship owners operating in the domestic coastal shipping and to enable indigenous ship owners to take control of the cabotage trade.

The fund is generated from the 2% of the contract sum performed by any vessel engaged in cabotage trade.

In the last 10 months, there have been a series of meetings between the management of the five appointed banks and NIMASA on what would be the interest rate for the loan.

While NIMASA had insisted that the interest from the counterpart fund from the banks must be single-digit, the banks on their part had said single-digit interest was not feasible considering the nature of the shipping operations in Nigeria.

The Director General of NIMASA, Dr Bashir Jamoh, said the agency had written an update to the Minister of Marine and Blue Economy on how far the agency had gone with the CVFF.

He said given the fact that the minister had just been appointed, it would take a little for him to settle down and give direction as to what would happen in the near future 

Shipping magnate and founding president of the Nigerian Shipowners Association (NISA), Chief Isaac Jolapamo, told our correspondent on phone that there is doubt in the minds of operators about the existence of the money.

“We, the indigenous shippers are planning to meet with the minister to set an agenda for him and part of what we will be putting on the table is the CVFF fund,” he stated.

Also reacting, the President of the Shipowners Association of Nigeria (SOAN), McGeorge Onyung, said no bank had the right to set conditions for the disbursement of the CVFF.

He urged the federal government to follow the cabotage guidelines.

Text messages and calls to the heads of corporate affairs of Polaris and Zenith banks were neither answered nor replied to.